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EARNINGS SHINE DESPITE SLUGGISH GROWTH, PNC INVESTMENT RESEARCH ANALYSTS SAY

 EARNINGS SHINE DESPITE SLUGGISH GROWTH,
 PNC INVESTMENT RESEARCH ANALYSTS SAY
 PHILADELPHIA, Sept. 4 /PRNewswire/ -- The outlook for U.S. corporate earnings remains bright despite the sluggish economic recovery, investment research analysts at PNC Financial Corp (NYSE: PNC) said today.
 In PNC's Investment Policy Statement for September, the analysts said earnings will show an increase of 20 percent for 1992 and 13 percent for 1993, as measured by the Standard & Poor's 500 stock index.
 As had been expected, the profits of many companies rose in the second quarter of this year, giving investors confidence that corporate fortunes were improving. This factor, coupled with the optimistic forecast for future earnings, should continue to drive the equity market and permit prices to rise somewhat further, the analysts said. They predicted the Dow Jones Industrial Average will trade between 3,200 and 3,500 over the next several months.
 The earnings rebound will not be accompanied by a sharp rise in interest rates, which means there is not likely to be much downward pressure on stock prices. "Short-term interest rates would have to rise to 5.7 percent before a cautionary signal would emanate from our asset allocations models," the analysts said. "With slow economic growth and low inflation, a rise in short-term rates of this magnitude is not in the cards."
 PNC continues to recommend an allocation of 65 percent equities and 35 percent bonds (with no cash in the equity portion) for balanced portfolios.
 The Investment Policy Statement also said that:
 -- The economy will grow at an annual rate of 2 to 2.5 percent during the third quarter, up from 1.4 percent (annualized) in the second quarter.
 -- Uncertainty regarding the November election and subsequent economic policy will reinforce demand for maturities of less than two years among fixed-income investments, "keeping them rich over the short term."
 PNC Financial Corp, headquartered in Pittsburgh, is the nation's 13th-largest bank holding company, with assets of $45.5 billion. It operates approximately 500 community banking offices in Pennsylvania, Kentucky, Ohio, Indiana and Delaware and conducts business through additional offices in 16 states.
 PNC's principal banking affiliates include: Pittsburgh National Bank, Pittsburgh; Provident National Bank, Philadelphia; Citizens Fidelity Bank, Louisville, Ky.; Central Trust, Cincinnati; Bank of Delaware, Wilmington, Del.; Northeastern Bank, Scranton, Pa.; Marine Bank, Erie, Pa.; PNC National Bank, Wilmington; Hershey Bank, Hershey, Pa.; and The First Bank and Trust Company, Mechanicsburg, Pa.
 /delval/
 -0- 9/4/92
 /CONTACT: Linda Wolohan of Provident National Bank, 215-585-5453/
 (PNC) CO: PNC Financial Corp ST: Pennsylvania IN: FIN SU: ECO


MP-LJ -- PH007 -- 6831 09/04/92 09:54 EDT
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Publication:PR Newswire
Date:Sep 4, 1992
Words:432
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